Free fatty acids (FFAs) contribute to the pathogenesis of type 2 diabetes through induction of insulin resistance. Although compelling data support this concept, the precise molecular mechanism by which FFAs lead to impairment of insulin signal transduction is largely unknown. To understand this molecular mechanism, we have been studying the role of IKK, a serine kinase whose activity is inversely associated with insulin sensitivity in IKK-deficient (IKK2-/+) mice and in our cellular models. Our data support that FFAs activate IKK, and this molecular event leads to a functional inhibition of two molecules, PPARgamma and IRS-1, whose activities are required for the maintenance of insulin sensitivity. Inhibition of PPARgamma, is reflected by a decreased transcriptional activity of PPARgamma on a PPRE reporter. The inhibitory activity of IKK requires the transcription factor NF-kB that inhibits PPARgamma through a competition for the nuclear cofactors, a mechanism independent of DNA-binding activity of PPARgamma. IKK suppresses the signaling function of IRS-1 through phosphorylation of serine residues including Ser307/312 in IRS-1. These observations have led us to a hypothesis that activation of IKK by free fatty acids contributes to insulin resistance through the functional inhibition of PPARgamma and IRS-I. Additionally, our data suggest that fatty acid translocase (CD36) may mediate the FFA-signal for activation of IKK. Since the adipocyte is a unique cell type with high levels of PPARgamma, IRS-1 and CD36, we plan to test this hypothesis in adipocytes as well as in transgenic mice. This study includes three specific aims: AIM I. To test that NF-kB mediates the IKK activity in the inhibition of PPARgamma activity leading to the impairment of insulin signaling by FFAs; AIM II. To demonstrate that an interaction of IKK with other serine kinases is required for the functional inhibition of IRS-1 by FFAs; AIM III. To test that the signaling function of CD36 is involved in the IKK activation by FFAs. The results from these aims will provide key evidence to support a new molecular model for understanding the pathogenesis of obesity-associated insulin resistance. This model will benefit the development of new strategies for prevention and treatment of type 2 diabetes.